Institutional Origins of Entrepreneurship and its Relationship with Regional Development

Abstract

The article discusses the theoretical aspects and prerequisites for the formation of entrepreneurship as an active factor affecting both the economic progress in general and development of regions. A new interpretation of the institutional approach in the context of using it under modern conditions of transformation of systems and methods of regional development management is proposed. A logical model of factors influencing the development of entrepreneurship is built, and a refinement concerning the use of the concept “object of observation” in economic research is made. The authors’ version of the content of the concepts “entrepreneurial climate” and “entrepreneurial environment” is provided, and the relationships in the responsible conceptual cluster are determined. Business environment is proposed to be considered as an aggregate of positive and negative factors which significantly affect performance of a business. The article describes basic characteristics of business environment, among which the investment climate, regulatory policy and readiness of society for innovative changes are of paramount importance. The development trend and effectiveness of regional management is provided not by the central bodies but by an integrated local mechanism, which is formed by coordinating the goals and interests of independent social organic structures within the framework of regional integrity and regional policy. A significant result of the study is the developed conceptual cluster, which is formed around the term “climate”. The relations between the characteristics of business climate and regional environment, which are attributed to the line of human factor, mentality and traditions, are established. “Climate”, “environment” are also interconnected through a system of barriers, tensions, and conflicts, together they act as assets of regional development. Based on the result obtained, it is concluded that scientific theory and scientific support (practical tools for transformation) are the dominant components of regional development, which can give a powerful impetus to the regional business sector.

Keywords

• institutional theory
• development
• influence factors
• region
• business climate
• business environment